GIFT  OF 


ACCOUNTING  SYSTEM 

for 

Corrugated  Fibre  Company 


Compiled  by 
W.    H.    BOZELL 

CHICAGO,  ILLINOIS 


Digitized  by  tine  Internet  Arciiive 
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m      IVIicrosoft  Corporation 


ittn7/www;:^rr.hi\/e.org/details/accountingsystenn00bozerich 


ACCOUNTING   SYSTEM 

for 

Corrugated  Fibre  Company 


By 

W.   H.    BOZELL 

March  9,   1916 


Copyright,  1916,  by  Corrugated  Fibre  Co 


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W.  H.e^ozrLL 


INTRODUCTION 


Cost  accounting  and  cost  finding  in  the  corrugated  paper  industry,  as  in  all  manufac- 
turing plants,  should  conform  very  closely  to  the  method  of  manufacture,  if  satisfactory 
results  are  to  be  obtained. 

The  manufacture  of  corrugated  fibre  products  falls  naturally  into  two  divisions. 

First.     The  manufacture  of  corrugated  board,  either  single  or  double  faced. 

Second.     The  manufacture  of  the  boxes  or  other  products  from  the  board. 

In  view  of  the  above  facts  the  Factory  Cost  of  corrugated  products  must  be  arrived 
at  by  first  obtaining  the  cost  of  the  corrugated  board,  which  is  the  most  easily  determined 
on  the  basis  of  1,000  square  feet.  After  the  cost  of  the  board  is  obtained  it  is  a  com- 
paratively simple  matter  to  arrive  at  the  cost  of  the  completed  boxes  by  adding  to  the 
cost  of  the  board  used  the  additional  material,  such  as  tape,  wrapping  paper,  etc.,  the 
direct  labor  in  the  box  making  department,  together  with  the  necessary  overhead  expenses. 

The  cost  of  corrugated  products  in  common  with  other  manufactured  materials  is 
made  up  of  material,  labor  and  expense. 

The  item  of  expense  naturally  falls  into  two  groups.  First,  the  Factory  Expense  or 
Factory  Burden,  and  second,  the  General  and  Selling  expenses. 

In  order  to  properly  segregate  these  expenses  proper  accounting  methods  are  necessary 
and  indispensable  if  correct  results  are  to  be  obtained. 

In  order  to  obtain  correct  labor  costs  and  to  make  a  proper  distribution  of  payroll 
between  productive  and  non-productive  labor  some  method  of  timekeeping  or  production 
reports  seems  to  be  absolutely  necessary  and  the  importance  of  this  part  of  the  work 
should  receive  the  earnest  consideration  of  every  manufacturer  in  your  industry. 

The  accounting  system  which  is  outlined  in  the  following  pages  is  intended  to  show 
as  concisely  as  possible  the  method  of  accounting  which  should  be  used  in  order  to  properly 
segregate  and  distribute  the  expenses  and  arrive  at  correct  overhead  percentages. 


.■=1 

364867 


I  am  subniittiug  a  list  of  the  necessary  accounts  (Exhibit  "AA")  which  shows  the 
manner  in  which  the  accounts  should  be  arranged  in  the  Trial  Balance.  You  will  notice 
that  the  expenses  have  been  considerably  subdivided  with  t'he  object,  primarily,  of  showing 
just  what  expenses  should  be  included  in  each  group.  In  actual  practice,  however,  it  may 
be  advisable,  particularly  in  some  of  the  smaller  factories,  to  combine  two  or  more  of 
these  expense  accounts  into  one.  The  accounts  have  been  divided  into  six  groups  or 
classes,  which  will  be  further  explained  in  the  following  paragraphs. 

FIXED  ASSETS  AND  LIABILITIES 

The  accounts  in  this  group  are  similar  to  those  in  general  use  by  factories  of  this  kind 
and,  generally  speaking,  need  no  particular  explanation. 

It  will  be  noticed  in  this  connection  that  in  those  factories  where  the  corrugated 
business  is  a  branch  that  the  accounts  in  this  group  will  be  unnecessary,  in  which  case  the 
form  of  Trial  Balance  shown  in  Exhibit  ' '  BB ' '  will  be  used. 

Reserve  for  Depreciation  account  should  be  credited  at  the  end  of  each  month  with 
one-twelfth  of  the  annual  amount  set  aside  for  depreciation  of  buildings,  machinery  and 
equipment,  at  the  same  time  debiting  Depreciation  expense  account  in  the  Factory  Burden 
group. 

When  machinery  or  other  equipment  is  worn  out  or  becomes  obsolete  its  value  will  be 
credited  to  Machinery  or  other  equipment  account  and  the  loss  charged  against  the  Reserve 
for  Depreciation.  In  arriving  at  Depreciation  at  least  10  per  cent  should  be  used  for 
Machinery  and  Equipment  and  .'i  to  4  per  cent  on  Building. 

CURRENT  ASSETS  AND  LIABILITIES 

The  accounts  in  this  group  are  the  same  as  those  ordinarily  in  use  and  will  be  handled 
in  the  usual  manner.  The  Raw  Materials  accounts,  that  is  the  several  accounts  of  Paper, 
Silicate  of  Soda,  Tape  and  other  raw  materials  are  intended  to  include  only  such  raw 
materials  as  can  be  figured  directly  into  the  cost  of  the  finished  product  an<l  should  not 
contain  any  Expense  items. 

MANUFACTURING  ACCOUNTS 

It  is  intended  to  charge  the  Payroll  account  with  the  total  amount  of  Wages,  Salaries, 
etc.,  paid  out  each  month  and  to  credit  the  account  at  the  end  of  the  month  bj- 
Journal  entry  with  the  entire  Payroll  for  the  month,  at  the  same  time  debiting  the 
several  accounts,  among  which  the  Payroll  should  be  distributed,  or,  in  other  words,  the 
Payroll  account  is  simply  a  clearing  account. 

In  order  to  arrive  at  Departmental  Burdens  the  Productive  Labor  has  beea^dLsfided 
into  two  accounts,  one  for  the  corrugating  or  board  making  department  and  one  for  the 
manufacturing  or  box  making  department.  If  desired,  all  Productive  Labor  can  be 
carried  in  one  account  and  the  division  made  in  a  memorandum  record  or  in  the  Payroll 
book  itself. 

The  Productive  Labor  accounts  are  intended  to  include  only  such  labor  as  can  be 
figured  directly  into  the  cost  of  the  finished  product  and  shouM  not  contain  any  Exjiense 
Labor. 

FACTORY  BURDEN  ACCOUNTS 

The  accounts  in  this  group  are  intended  to  include  all  of  the  Manufacturing  expenses, 
and  should  not  contain  any  of  the  Selling  or  Administrative  expense.     As  explained   in  a 
previous  paragraph,  two  or  moxe  of  these  accounts  may  in  some  cases  be  combined   into 
one,  but  in  all  cases  care  must  be  taken  to  make  a  proper  division  between  the  Manufac 
turing  expenses  and  the  Selling  and   General  Expenses. 

Supervision  account  is  intended  to  include  the  wages  of  the  superintendent,  foreman, 
watchman  and  shop  clerks. 

The  Non-productive  Labor  accounts  are  intended  to  include  all  Expense  Labor,  such 
as  cleaning,  sweeping,  unloading  cars,  handling  and  trucking  materials,  etc. 

The  Non-productive  Labor  has  been  divided  into  two  accounts  for  the  same  reasons 
given  in  connecjtion  with  Productive  Labor.  If  preferred,  however,  all  of  the  Non-pro- 
ductive Labor  can  be  carried  a.s  one  account  and  subdivided  in  a  memorandum  record  or 
in  the  Payroll  book  itself. 

The  importance  of  making  a  careful  division  between  Productive  and  Non-productive 
Labor  cannot  be  over-emphasized. 

Depreciation  account  has  been  explained  in  connection  with  the  Reserve  for  Dej)recia- 
tion.  Most  of  the  remaining  accounts  in  this  group  are,  no  doubt,  sufficiently  self- 
explanatory.  General  Factory  Expense  account  is  intended  to  include  all  of  the  miscel- 
laneous factory  expenses  which  cannot  properly  be  charged  to  any  other  Factory  Bunion 
account.     This  account  should  not  include  any  Selling  or  Administrative  exjienses. 


SELLING  EXPENSE  ACCOUNTS 

The  accounts  in  this  group  are  intended  to  include  all  of  the  Administrative  and 
Selling  expenses,  none  of  which  can  properly  be  included  in  the  Factory  Burden  group 
The  expenses  in  this  group  have  been  divided  into  a  considerable  number  of  accounts, 
but,  as  previously  explained,  two  or  more  of  these  different  accounts  may  be  combined 
into  one,  if  thought  desirable.  There  has  been  some  question  as  to  whether  Delivery 
expense  should  be  added  directly  to  each  order  or  included  in  the  Selling  expense,  but  I 
am  of  the  opinion  that  it  will  be  rather  difficult  to  figure  it  directly  into  the  cost  of  each 
order  and  have,  therefore,  included  it  in  the  Selling  expense  group. 

REVENUE  ACCOUNTS 

The  Revenue  accounts  consist  primarily  of  sales  of  manufactured  goods,  but  I  have 
also  included  sales  of  waste  paper,  discounts  on  purchases  and  interest  received  in  this 
group. 

As  freight  prepaid  on  shipments  or  freight  allowed  should  be  applied  directly  to 
each  order,  I  have  included  same  in  this  group,  the  intention  being  at  the  end  of  the 
year  to  deduct  this  amount  from  the  total  sales. 

PROFIT  AND  LOSS  STATEMENT 

I  am  submitting  herewith  a  statement  showing  the  manner  in  which  the  Profit  and 
Loss  Statement  and  Expense  Analysis  should  be  worked  up  (Exhibit  "C").  The  figures 
used  in  this  statement  are,  of  course,  fictitious,  but  are  used  simply  to  illustrate  the 
method.  However,  the  item  of  profit  (No.  7)  should  be  proved  against  the  Profit  figures 
shown  by  the  Balance  Sheet.  If  the  method  of  accounting  outlined  in  the  previous 
paragraphs  is  used   the  data  for  preparing  this  statement  can  be  easily  obtained. 

The  Factory  Burden  items  shown  in  this  statement  should  be  further  divided  as 
shown  in  Exhibit  "D"  between  the  Corrugated,  or  board  making  department  and  the 
Manufacturing,  or  box  making  department. 

The  Productive  Labor  should  also  be  divided  in  the  same  manner. 

The  Factory  Burden  percentage  in  each  department  will  be  arrived  at  by  dividing 
the  total  expense  in  that  department  by  the  Productive  Labor. 

In  making  a  division  between  departments  such  items  as  rent,  taxes  and  insurance 
on  buildings,  repairs  to  buildings  and  depreciation  on  buildings  would  be  divided  on  the 
basis  of  floor  space,  power  on  the  basis  of  horsepower  used,  making  allowance  for  steam 
used  in  corriigating  machines,  and  depreciation  on  machinery  and  equipment  according  to 
the  value  of  same  in  each  department.  Repairs  to  machinery  should  be  distributed  on 
actual  cost  basis  as  far  as  possible. 

Referring  again  to  Exhibit  "  C "  the  Selling  expense  percentage  is  obtained  by 
dividing  the  total  Selling  expense  by  the  Factory  Cost. 

It  is  the  intention  to  apply  the  Factory  expense  on  the  basis  of  Labor  Cost,  using 
different  percentages  for  each  department.  It  is  the  intention  to  apply  the  Selling 
expense  on  the  basis  of  Factory  Cost. 

UNIFORM  METHOD 

In  Exhibit  "  E "  the  method  of  arriving  at  the  Factory  Cost  of  board  is  illustrated, 
also   the  method  of   figuring  the   complete   cost   of   boxes   or   other   manufactured   articles. 

COST  CHART 

The  method  of  figuring  the  cost  of  corrugated  products  is  also  illustrated  in  the 
chart  submitted  herewith. 

An  accounting  system  for  arriving  at  profits  each  month  will  be  outlined  in  the 
following  pages. 


Perpetual  Inventory  Accounting 

The  method  of  accounting  outlined  in  the  following  paragraphs  is  intended  to  show 
the  amount  of  Profits  earned  each  month,  also  whether  the  Factory  Burden  percentages 
and  the  Selling  Expense  percentage  which  are  being  used  are  correct  or  not.  The  Kaw 
Materials  accounts  and  Work  in  Process  account  will  also  represent  the  actual  inventories 
as  of  the  Trial  Balance  date. 

If  this  method  is  used  it  will  involve  four  new  accounts: 
Work  in  Process, 
Reserve  for  Factory  Burden, 
Reserve  for  Selling  Expense, 
Cost  of  Sales. 

It  will  be  noticed  from  Exhibits  "A"  and  "B"  that  the  accounts  in  general  are 
the  same  as  given  in  the  first  part  of  this  report,  with  the  exception  of  the  above  new 
accounts. 

WORK  IN  PROCESS 

Work  in  Process  account  would  be  opened  with  the  inventory  of  goods  in  process 
of  manufacture,  also  any  finished  .stock  on  hand.  At  the  end  of  each  month  this  account 
will  be  debited  with  the  value  of  all  raw  materials  used  during  the  month,  at  the  same 
time  crediting  the  several  Raw  Materials  accounts.  After  this  entry  is  made  the  Raw 
Materials  accounts  will   represent   the  inventory   value   of  the  several   kinds  of  material. 

Work  in  Process  will,  be  debited  at  the  end  of  each  month  with  the  Total  Productive 
Labor  for  the  month.  This  account  will  also  be  debited  with  the  total  amount  of  Factory 
Burden  applied  to  orders  during  the  month,  at  the  same  time  crediting  the  Reserve  for 
Factory  Burden   account. 

Work  in  Process  will  be  credited  at  the  end  of  each  month  with  the  Factory  Cost  of 
all  goods  shipped  and  billed  during  the  month,  at  the  same  time  debiting  the  Cost  of 
Sales  account.  After  the  above  entry  is  made  the  balance  in  Work  in  Process  account 
will  represent  the  inventory  of  all  goods  in  process  or  finished. 

RESERVE  FOE  FACTORY  BURDEN 

Reserve  for  Factory  Burden  account  will  be  credited  at  the  end  of  each  month  with 
the  total  amount  of  Factory  Burden  applied  to  orders  during  the  month,  which  amount 
will  be  arrived  at  by  taking  a  percentage  of  the  Productive  Labor,  using  different 
percentages  for  the  two  departments. 

The  Credit  Balance  in  this  account  should  equal  the  sum  of  the  Debit  Balances  of 
all  the  Factory  Burden  ac^'ounts,  and  if  so,  it  will  indicate  that  the  percentages  which  are 
being  used  are  sufficiently  high  and  vice  versa. 

RESERVE  FOR  SELLING  EXPENSE 

Reserve  for  Selling  Expense  account  vciU  be  credited  at  the  end  of  the  month  with 
the  total  Selling  Expense  applied  to  sales* shipped  and  billed  during  the  month,  which 
amount  will  be  arrived  at  by  taking  a  percentage  of  the  Factory  Cost  of  goods  sold,  at 
the  same  time  debiting  the  Cost  of  Sales  account. 

COST  OF  SALES  ACCOUNT 

Cost  of  sales  account  will  be  debited  at  the  end  of  each  month  with  the  factory 
Cost  of  orders  shipped  and  billed  during  the  month  (as  stated  above)  also  with  the 
percentage  of  Selling  Expense  applied  to  same,  as  explained  in  a  previous  paragraph.  In 
this  connection,  the  Cost  of  Sales  may  be  obtained  by  figuring  the  cost  of  each  order  or 
by  taking  an  inventory  of  goods  in  process  and  finished  apd  transferring  the  balance  of 
the  Work  in  Process   account. 

It  will  be  noticed  by  referring  to  the  Trial  Balance  (Exhibit  "A"  and  "B")  that 
the  amount  of  Profits  each  month  may  be  readily  ascertained  by  comparing  the  Debit 
Balances  in  the  Cost  of  Sales  account,  plus  freights  prepaid,  with  the  sum  of  the  Credit 
Balances  ofi  the  Revenue  accounts,  as  indicated  by  the  sub-footings. 

Respectfully  submitted, 

W.  H.  BOZELL,  Public  Accountant, 
March   9,    1916.  513   Monadnock    Block,   Chicago,    111. 

COST   COMMITTEE: 
Chas.  H.  Limbach 
Irving  Hill 
James  B.   Fenton 


EXHIBIT  A  A 

CORRUGATED   FIBRE   COMPANY 

TRIAL  BALANCE  AND  LIST  OF  ACCOUNTS 

Fixed  Assets  and  Liabilities 

Capital  Stock $  44.00 

Surplus     1-00 

I'rofit   and   Loss 1.00 

Real  Estate   Land $  1.00 

Real  Estate  Buildings 1  00 

Machinery     1-00 

Teams   and    Wagons LOO 

Office  Furniture  and  Fixtures LOO 

Sub-footing    $  5.00             ^  26.00 

Current  Assets  and  Liabilities 

Cash— Petty 1  00 

Cash— Bank 1  00 

Accounts   Receivable    LOO 

Bills    Receivable    1 .00 

Accounts    Pflyahle.    — ^^^■-■-. LOO 

Bills  Payable    LOO 

Personal    Accounts LOO 

Paper   Jute    LOO 

Paper   Chip    LOO 

Paper  Straw LOO 

Wrapping   Paper    LOO 

Twine    LOO 

Silicate    LOO 

Glue    1.00 

Wire    LOO 

Tape    /... LOO 

Ink     LOO 

Sub-footing     $  15.00             $     2.00 

Manufacturing  Accounts 

Pay  Roll 00 

Productive   Labor   Corrugating 1.00 

Productive  Labor  Manufacturing 1.00 

Sub-footing    2.00 

Factory  Burden  Accounts 

Supervision     .- 1  00 

Non  Productive  Labor;  Board  Dept LOO 

Non  Productive  Labor;  Mfg.  Dept LOO 

Taxes     LOO 

Insurance   LOO 

Depreciation    LOO 

Warehouse   Expense    LOO 

Power    LOO 

Light  and  Heat LOO 

Rental     •  LOO 

Die  Expense   LOO 

Experimental  Expense    LOO 

Repair  Buildings    LOO 

Repair  Machinery  and  Equipment LOO 

General   Factory  Expense LOO 

Sub-footing    $  15.00 


EXHIBIT  A  A 

Selling  Expense  Accounts 

Salaries 1.00 

Office  Supplies    1.00 

Postage    1.00 

Telephone  and  Telegrams 1.00 

Interest     1.00 

Discount,  Allowed    1.00 

Corrugated  Fibre  Co.  Expense 1.00 

Legal  Expense 1.00 

Loss  on  Bad^Accounts 1.00 

Shipping  Labor 1.00 

Delivery   Expense    1.00 

Sample   Expense    1.00 

Catalog 1.00 

Advertising   ,  .  .' 1.00 

Commissions 1.00 

Selling  Salaries    1.00 

Traveling  Expense 1.00 

Branch  Office  Expense 1.00 

Miscellaneous   Selling   Expense *. *.  .  .  .  1.00 

Sub  footing    $  19.00 


Revenue  Accounts 

Freight,   outgoing 1.00 

Sales 60.00 

Waste  Sales    1.00 

Discount    on    Purchases 1.00 

Interest   Eeceived    1.00 


Sub-footing    1.00  63.00 

Grand  Total $  57.00  $  57.00 


EXHIBIT  BB 

CORRUGATED  FIBRE   COMPANY 

TRIAL   BALANCE    AND    LIST    OF   ACCOXJNTS 

General  Office  Factory  Account $  33.00 

Inventory  Accounts 

Paper   Jute $  1.00 

Paper    Chip    1.00 

Paper  Straw    1.00 

Wrapping  Paper  1.00 

Twine 1.00 

Silicate    1.00 

Glue    1.00 

Wire    1.00 

Tape    1.00 

Ink     1.00 

Sub-footing .$  10.00  $  33  00 

Manufacturing  Accounts 

Pay    Roll    00 

Productive   Labor   Corrugating 1.00 

Productive    Labor    Manufacturing 1.00 

Sub-footing    2.00 

Factory  Burden  Accounts 

Supervision 1.00 

Non  Productive  Labor;  Board  Dept 1.00 

Non  Productive  Labor;  Mfg.  Dept 1.00 

Taxes    1.00 

Insurance  " 1.00 

Depreciation 1.00 

Warehouse   Expense    1.00 

Power  Electric    1.00 

Light  and  Heat 1.00 

Rental     l.OO 

Die  Expense    1.00 

Experimental  Expense 1.00 

Repair  Buildings 1.00 

Repair  Machinery  and  Equipment 1.00 

General   Factory   Exi)ense 1.00 

I'sToo 

Selling  Expense  Accounts 

Salaries     1.00 

Office   Supplies    1.00 

Postage     1.00 

Telephone  and  Telegrams 1.00 

Interest     1.00 

Discount,  Allowed    1 .00 

Corrugated   Fibre  Co.   Expense 1.00 

Legal  Expense    1.00 

Loss  on  Bad  Accounts 1.00 

Shipping  Labor    1 .00 

Delivery   Expense    1.00 

Sample    Expense    1.00 

Catalogs    1.00 

Advertising    1.00 

Commissions    1.00 

Selling  Salaries 1.00 

Traveling  Expense .  l.OO 

Branch  Office  Expense 1.00 

Sub-footing 18.00 

Revenue  Accounts 

Freight,    outgoing    1.00 

Sales    10.00 

Waste   Sales    .' 1.00 

Discount    on    Purchases 1 .00 

Interest   Received    1 .00 

Sub-footing     1.00         '        iXoO 

Grand   Total    ...$114.00  $114  00 

9 


EXHIBIT  A 

CORRUGATED   FIBRE    COMPANY 

TRIAL  BALANCE  AND  LIST   OF   ACCOUNTS 

General  Office  Factory  Account $  18.00 

Inventory  Accounts 

Paper   Jute    $  1.00 

Paper   Chip    1.00 

Paper   Straw 1.00 

Wrapping   Paper    1.00 

Twine    1.00 

Silicate    1.00 

Glue     1.00 

Wire    1.00 

Tape 1.00 

Ink     1.00 

Sub-footing    $  10.00  $   18.00 


Manufacturing  Accounts 

Work  in  Process 40.00 

Pay   Roll    00  .00 

Sub-footing     


Factory  Burden  Accounts 

Supervision    $  1.00 

Non  Productive  Labor;  Board  Making  Dept 1.00 

Non  Productive  Labor;  Mfg.  Dept 1.00 

Taxes    1.00 

Insurance   1.00 

Depreciation    1.00 

Warehouse   Expense 1.00 

Power,   Electric    1.00 

Light  and  Heat 1.00 

Rental     1.00 

Die  Expense    1  00 

Experimental  Expense   1.00 

Repair  Buildings   1.00 

Repair  Machinery  and  Equipment 1.00 

General  Factory  Expense 1.00 

Reserve  for  Factory  Burden 16.00 

Sub-footing     -. $  15.00             $  16.00 

Selling  Expense  Accounts 

Salaries     - 1-00 

Office  Supplies    1.00 

Postage     100 

Telephone  and  Telegrams 1.00 

Interest     1-00 

Discount,  Allowed   1.00 

Corrugated  Fibre  Co.  Expense 1.00 

Legal  Expense    1.00 

Loss  on  Bad  Accounts 1-00 

Shipping  Labor    1.00 

Delivery   Expense    100 

Sample   Expense    1.00 

Catalog    100 

Advertising   1-00 

Commissions    1-00 

Selling  Salaries    1.00 

Traveling  Expense 1.00 

Branch  Office  Expense 1.00 

Reserve    for   Selling    Expense 17.00 

Sub-footing ••$  18.00             $  17.00 

lU 


EXHIBIT   A 
Revenue  Accounts 

Freight,   outgoing    1.00 

Cost   of  Sales 40.00                 60.00 

Sales    60.00 

Waste   Sales    1.00 

Discount    on    Purchases 1.00 

Interest   Received    1.00 

Sub-footing    41.00                 63.00 

Grand   Total    $114.00  $114.00 


11 


EXHIBIT  B 

CORRUGATED   FIBRE    COMPANY 

TRIAL  BALANCE  AND  LIST  OF  ACCOUNTS 

Fixed  Assets  and  Liabilities 

Capital  Stock    34.00 

Surplus   1.00 

Profit   and  Loss 1.00 

Real  Estate  Land 1.00 

Real  Estate  Buildings 1.00 

Machinery 1.00 

Teams   and   Wagons 1.00 

Office  Furniture  and  Fixtures 1.00 

Sub-footing    $     5.00  $  36.00 


Current  Assets  and  Liabilities 

Cash— Pettv 1.00 

Cash— Bank     1.00 

Accounts    Receivable    1.00 

Bills  Receivable   1.00 

Accounts  Pavable    1.00 

Bills  Payable    1.00 

Personal  Accounts   1.00 

Paper  Jute 1.00 

Paper  Chip 1.00 

Paper  Straw   100 

Wrapping  Paper 1.00 

Twine    •  -  1.00 

Silicate    : 1.00 

Glue 1.00 

Wire    1.00 

Tape 1.00 

Ink     1.00 

Sub-footing    $  15.00  $     2  00 

Manufacturing  Accounts 

Work   in   Process 40.00 

Pay   Roll 00 

Sub-footing •  •  ■  40.00 ^ 

I'actory  Burden  Accounts 

Supervision    • 1.00 

Non  Productive  Labor;  Board  Dept 1.00 

Non  Productive  Labor;  Mfg.  Dept 1.00 

Taxes     1-00 

Insurance   1-00 

Depreciation    1-00 

Warehouse   Expense    1.00 

Power    1.00 

Light  and  Heat 1.00 

Rental     1-00 

Die  Expense    •  •  • 1-00 

Experimental  Expense   1.00 

Repair  Buildings    1.00 

Repair  Machinery  and  Equipment 1.00 

General   Factory   Expense 1.00 

Reserve  for  Factory  Burden 16.00 

Sub-footing    $  15.00  $  16.00 


12 


EXHIBIT  B 

Selling  Expense  Accounts 

.       Salaries     ; 1.00 

Office  Supplies    1.00 

Postage     1.00 

Telephone  and  Telegrams 1.00 

Interest     1.00 

Discount,  Allowed    ; 1.00 

Corrugated  Fibre  Co.  Expense 1.00 

Legal   Expense    1.00 

Loss  on  Bad  Accounts 1.00 

Shipping   Labor    1.00 

Delivery   Expense    1.00 

Sample    Expense     1.00 

Catalog    1.00 

Advertising    1.00 

Commissions    1.00 

Selling  Salaries    1.00 

Traveling  Expense 1.00 

Branch  Office  Expense 1.00 

Miscellaneous  Selling  Expense 1.00 

Reserve  for  Selling  Expense 18.00 

Sub-footing    .$  19.U0              $   18.00 

Revenue  Accounts 

Freight,  outgoing   1.00 

Cost   of   Sales 40.00 

Sales    60.00 

Waste  Sales  1.00 

Discount  on  Purchases 1.00 

Interest    Received    : 1.00 

Sub-footing    41 .00                 63.00 

Grand  Total   $l.'ju.00  $135.00 


13 


EXHIBIT  C 
CORRUGATED   FIBRE    COMPANY 
PROFIT  AND  LOSS  STATEMENT 

1  Materials    $  65,000.00  $  65,000.00 

2  Labor     10,500.00  10,500.00 

3  Factory  Burden: 

Supervision     .00 

Non  Productive  Labor,  Board .00 

Non  Productive  Labor,  Mfg .00 

Taxes    .00 

Insurance    .00 

Depreciation .00 

Warehouse   Expense    .00 

Power,  Electric .00 

Light  and  Heat .00 

Rental    .00 

Die   Expense    .00 

Experimental  Expense    .00- 

Repair  Buildings    .00 

Repair  Machinery  and  Equipment .00 

General   Factory  ^  Expense 00  14,500.00 

4  Factory  Cost   $  90,000.00 

5  Selling  Expense: 

Salaries .00 

Office  Supplies   .00 

Postage    00 

Telephone  and  Telegrams .00 

Interest    .00 

Discount,  Allowed 00 

Corrugated  Fibre  Co.  Expense .00 

Legal   Expense    .00 

Loss  on  Bad  Accounts 00  ' 

Shipping   Labor    .00 

Delivery   Expense    ,00 

Sample  Expense   .00 

Catalogs    .00 

Advertising    .00 

Commissions    00  . 

Selling   Salaries .00 

Traveling   Expense    .00 

Branch  Office  Expense .00 

Miscellaneous  Selling  Expense • .00  10,000.00 

6  TOTAL  COST 100,000.00 

7  PROFIT    11,000.00 

8  SALES    $111,000.00 

NOTE: — Factory  Burden  to  Productive  Labor  Corrugating  Dept 200% 

Factory  Burden  to  Productive  Labor  Mfg.  Dept 117% 

Selling  Expense  to  Factory  Cost 11  1/9% 


14 


EXHIBIT  D 
CORRUGATED   FIBRE    COMPANY 

DEPARTMENTAL  BURDENS 

Corrugating  Mnfg. 

Factory  Burden:                                                                                      Total  Dept.  Dept. 

Supervision    .00  .00  .00 

Non  Productive  Labor,  Board .00  .00  .00 

Non  Productive  Labor,  Mfg .00  .00  .00 

Taxes     .00  .00  .00 

Insurance    .00  .00  .00 

Depreciation    00  .00  .00 

Warehouse    Expense    .00  .00  .00 

Power,   Electric    .00  .00  .00 

Light  and  Heat .00  .00  .00 

Rental    .00  .00  .00 

Die  Expense    .00  .00  .00 

Experimental  Expense    .00  .00  .00 

Repair   Buildings    .00  .00  .00 

Repair  Machinery  and  Equipment .00  .00  .00 

General  Factory   Expense .00  .00  .00 

14,500.00  5,250.00  9,250.00 

Productive   Labor    10,500.00  2,625.00  7,875.00 

Factory  Burden  to  Productive  Labor %  200%  117% 


CORRUGATED  FIBRE  COIVLPANY 
UNIFORM  METHOD 


Outer    Liner    ." 70#      @     55.00                   1.92 

Inner  Liner    70#      @     50.00     '               1.75 

Straw  Board    58#     @     30.00                     .87 

Silicate    .25 

479 

Stock  Waste  5% .24 

Total   Materials    5.03 

Labor     Corrugating  .00 

Double  Backing  .00                     .17 

Factory  Burden   2007^,    .  .34 

Factory   cost   per    1,000   sq.    ft 5.54 

1,000    Boxes                      201/4x141/2x251/2  175#     Test    Board 

22,540  sq.  ft.  Board" @       5.54               124  87 

Tape    1.50 

Wrapping  Paper  and  Twine 2.00 

128.37 

Labor     ■                                    4.00 

Factory  Burden     @  115%   4.60 

Factory  Cost   136.97 

Selling  Expense     @  12i/>%    17.12 

Total  Cost    154.09 

Profit     15  91 

Price,   Net 170.00 

15 


EXHIBIT  E 
MONTHLY  PROFIT  AND  LOSS   STATEMENT 

1.  Materials  used    1.00 

2.  Labor,   direct 1.00 

3.  Factory  Burden    1.00 

4.  Factory  Cost  of  Production 3.00 

Add  decrease  in  inventory  of  work  in  process,  or .00 

Deduct  increase  in  inventory  of  work  in  process .00 

5.  Factory  Cost  of  Sales 3.00 

6.  Selling  Expense   1.00 

7.  Total  Cost    4  00 

8.  Profit     1.00 

9.  Sales    5.00 


Actual  Factory  Burden 4.00 

Applied  Factory  Burden 3.00 

Under  Applied  Burden 1.00 

Actual  Selling  Expense 4.00  ' 

Applied  Selling  Expense 4.50 

Over  Applied  Expense .50 

Net  Under  Applied  Expense   (Loss) .50 

Profit   as   above • 1.00 

Net  Profit  for  the  Month .50 


16 


THIS  BOOK  IS  DUE  ON  THE  LAST  DATE 
STAMPED  BELOW 

AN  INITIAL  FINE  OF  25  CENTS 

WILL  BE  ASSESSED  FOR   FAILURE  TO   RETURN 
THIS   BOOK   ON   THE   DATE   DUE.   THE   PENALTY 
WILL  INCREASE  TO  50  CENTS  ON  THE  FOURTH 
DAY    AND    TO    $1.00    ON    THE    SEVENTH     DAY 
OVERDUE. 

gOCT    24  1935 

iH               kA  A  n      C^     in^Q 

'm           MAR    O    ly^" 

'SPfi  13  Jfl^, 

«^H  n  ^S*'^ 

J 

LD  21-100m-7.'33 

3  6  +^6  7 


P2&Z 


UNIVERSITY  OF  CAUFORNIA  UBRARY 


